To hold auditors liable under the Securities Act of 1933,third parties have to show
A)the auditor was negligent in performing the audit
B)the audited financial statements contained a material misrepresentation or omission
C)the auditor was fraudulent in performing the audit
D)the auditor attempted to deceive users of the financial statements

Question

Quizplus · Accepted Answer

To hold auditors liable under the Securities Act of 1933, third parties have to show that the audited financial statements contained a material misrepresentation or omission. The Act includes a strict liability provision, which means that auditors can be held liable even if they were not negligent or fraudulent, as long as the financial statements contained a material misrepresentation or omission. However, it is still possible to hold auditors liable for negligence or fraud.

To Hold Auditors Liable Under the Securities Act of 1933,third